Airport competition: Reality or myth?
This paper examines the extent to which the trend towards increasing corporatization and privatization of the airports sector has altered the dynamic between airports, airlines and most importantly the end-customer, the air passenger or the cargo-shipper. Observed passenger behaviour shows that in spite of increasing use of secondary airports, in particular by low cost carriers, passengers' preference to use their local airport is stronger than is predicted by isochrones analysis. The paper finds no evidence of an increasing rate of route openings or closures; passengers face significant switching costs in terms of surface access time and money while for airlines switching costs take the form of investment in facilities, staff recruitment and foregone revenue. Where airlines’ do exit a market, the paper finds that they will be replaced if there is sufficient demand, but not if there is an insufficient consumer base to support viable commercial operations. In conclusion, the paper finds limited evidence of secondary airports being able to compete effectively with their larger neighbours. The recent trend for airlines, including low-cost carriers, to migrate services from secondary to primary airports supports this conclusion, implying an ongoing need for robust economic regulation at primary airports across Europe.
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- Abstract reprinted with permission of Elsevier.
- Wiltshire, James
- Publication Date: 2018-3
- Media Type: Digital/other
- Features: Figures; Maps; References;
- Pagination: pp 241-248
- Journal of Air Transport Management
- Volume: 67
- Publisher: Elsevier
- ISSN: 0969-6997
- Serial URL: http://www.sciencedirect.com/science/journal/09696997
- TRT Terms: Airlines; Airports; Business practices; Competition; Low cost carriers; Markets; Passengers; Privatization
- Subject Areas: Administration and Management; Aviation; Economics;
- Accession Number: 01668855
- Record Type: Publication
- Files: TRIS
- Created Date: Feb 14 2018 4:59PM